Kinder Morgan Interstate Gas Transmission LLC

Fourth Revised Volume No. 1-B

Effective Date: 12/01/2000, Docket: RP01- 70-000, Status: Effective

Third Revised Sheet No. 89A Third Revised Sheet No. 89A : Effective

Superseding: First Revised Sheet No. 89A

GENERAL TERMS AND CONDITIONS OF SERVICE - continued

36.5 Capacity Release.

With the exception of short-term (less than one year) capacity

release transactions that occur during the period March 27,

2000 until September 30, 2002, the maximum price cap for the

release of capacity under a Negotiated Rate agreement shall be

the Recourse Rate. Transporter and a Releasing Shipper may,

in connection with their agreement to a negotiated rate, agree

upon payment obligations and credit mechanisms in the event of

capacity releases that vary from or are in addition to those

set forth in Section 23.13 of these General Terms and

Conditions.

36.6 Rate Treatment.

Transporter shall have the right to seek in future general

rate proceedings discount-type adjustments in the design of

its rates related to negotiated rate agreeements that were

converted from pre-existing discount adjustments to negotiated

rate agreements, provided that the type of pre-existing

service is not altered as a result of the conversion to a

negotiated rate. In those situations, Transporter may seek a

discount-type adjustment based upon the greater of: (a) the

negotiated rate revenues received or (b) the discounted rate

revenues which otherwise would have been received.

36.7 Right of First Refusal.

The right of first refusal provided with respect to certain

Shipper's firm service agreements, as described in Section 18

of the General Terms and Conditions, shall not apply to firm

service agreements with Negotiated Rates, unless otherwise

agreed to in writing by Transporter.

36.8 Negotiated Rate Surcharge and Fuel Retention Components.

If Transporter negotiates surcharge or fuel retention

percentage rate components at lower than the maximum rate

level for those components as part of a Negotiated Rate

agreement, it will assume any risk of under-recovery of costs

or fuel retention from negotiated shippers in order to ensure

that its recourse Shippers are not adversely affected due to

Negotiated Rate agreements with individual Shippers. If

Transporter negotiates specific surcharge components of its

rates, rather than total rates, as part of a Negotiated Rate

agreement, the discount order policy in Section 33 of the

General Terms and Conditions shall not apply.